Summary of Proposed Modifications to
the Original Servicing Order

DWR's proposed modifications to the Original Servicing Order and related attachments have been compared to the Original Servicing Order that was approved in D.02-05-048. In addition, the proposed modifications have been reviewed in light of the Contract Allocation Decision. Appendix A of this decision reflects DWR's proposed modifications to the Original Servicing Order through the use of underlining and strikeout markings.

The proposed modifications fall into the following categories:

· Definitions and requirements relating to the DWR contracts allocated to PG&E in the Contract Allocation Decision.

· Definitions and requirements relating to the surplus energy sales and remittances that PG&E will be responsible for.

· Definitions and requirements relating to the Operating Order.

· Certain attachments to be provided by PG&E in Service Attachment 2.

In addition to DWR's proposed modifications, additional changes have been made by us to the Original Servicing Order and the related attachments. These additional changes are described in the discussion section below, and also reflect that an Operating Order is expected to be approved, rather than an Operating Agreement.